World Fuel Services 2007 Annual Report Download - page 35

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64435 TX 27WORLD FUEL SERVICES
ANNUAL REPORT
26-Feb-2008 23:30 EST
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9.9.26
in allocated corporate expenses, was attributable to increases in compensation and employee benefits and general
and administrative expenses, partially offset by a decrease in provision for bad debt.
Corporate overhead costs not charged to the business segments was $27.0 million for 2007, an increase of
$1.6 million, or 6.4% as compared to 2006. The increase in corporate overhead costs was attributable to increases
in compensation and employee benefits and general and administrative expenses.
Other Expense and Income, net. In 2007, we had other income, net, of $0.7 million, a decrease of
approximately $4.1 million, as compared to other income, net, of $4.8 million for 2006. The decrease in other
income, net, was primarily due to a $1.9 million investment impairment charge resulting from the write-down of
our commercial paper investment, foreign currency exchange losses reported for 2007 as compared to foreign
currency exchange gains reported for 2006 and a decrease in interest income due to lower interest rates and lower
average invested balances. Partially offsetting these decreases was lower interest expense as a result of the
capitalization of interest expenses of approximately $1.0 million related to our enterprise integration project.
Taxes. For 2007, our effective tax rate was 24.5% and our income tax provision was $21.2 million, as
compared to an effective tax rate of 21.3% and an income tax provision of $17.4 million for 2006. The higher
effective tax rate for 2007 resulted primarily from additional income tax expense recorded in connection with the
new accounting guidance of Financial Accounting Standard Board Interpretation No. 48, “Accounting for
Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109” (“FIN 48”) in 2007 as well as
fluctuations in the actual results achieved by our subsidiaries in tax jurisdictions with different tax rates.
Net Income and Diluted Earnings per Share. Net income for 2007 was $64.8 million, an increase of $0.8
million, or 1.3%, as compared to 2006. Diluted earnings per share for 2007 was $2.23 per share, an increase of
$0.02 per share, or 0.9%, as compared to 2006.
2006 compared to 2005
Revenue. Our revenue for 2006 was $10.8 billion, an increase of $2.1 billion, or 23.5%, as compared to
2005. Our revenue during these years was attributable to the following segments (in thousands):
2006 2005 $ Change
Marine segment ......................... $ 5,785,095 $4,467,695 $1,317,400
Aviation segment ........................ 4,579,337 3,938,266 641,071
Land segment .......................... 420,704 327,986 92,718
Total ............................. $10,785,136 $8,733,947 $2,051,189
Our marine segment contributed $5.8 billion in revenue for 2006, an increase of $1.3 billion, or 29.5%, as
compared to 2005. Of the total increase in marine segment revenue, $909.3 million was due to increased sales
volume, primarily due to additional sales to new and existing customers. The remaining increase of $408.1
million was due to an increase in the average price per metric ton sold as a result of higher world oil prices in
2006.
Our aviation segment contributed $4.6 billion in revenue for 2006, an increase of $641.1 million, or 16.3%,
as compared to 2005. Of the total increase in aviation segment revenue, $600.2 million was due to an increase in
the average price per gallon sold as a result of higher world oil prices in 2006. The remaining increase of $40.9
million was due to net increased sales volume.
Our land segment contributed $0.4 billion in revenue for 2006, an increase of $92.7 million, or 28.3% as
compared to 2005. Of the total increase in land segment revenue, $57.7 million was due to an increase in the
average price per gallon sold as a result of higher world oil prices in 2006. The remaining revenue increase of
$35.0 million was primarily due to increased sales volume to new and existing customers.
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